Morgan Stanley has maintained an ‘Underweight’ rating on L&T Finance, reducing the target price to ₹112/share from ₹115/share, reflecting a potential downside of 21.9% from the current market price (CMP) of ₹143.60.
Key updates include:
- EPS estimates for FY2025-27 have been cut by 2.7%, 2.7%, and 2.4%, respectively.
- The projected retail loan CAGR for FY2024-27 has been reduced to 20%, down from the earlier 21%.
- Adjustments were made to net interest margin (NIM), operating cost, and credit cost assumptions for FY2025-27.
- Early signs of asset quality deterioration have started to emerge, raising concerns over the company’s short-term outlook.
While Morgan Stanley notes that the company is moving in the right direction for long-term growth, it believes the current valuation has surged too quickly, leading to a cautious outlook.
Disclaimer: The above analysis is based on inputs provided and is for informational purposes only. It does not constitute financial advice. Readers are advised to consult their financial advisors before making any investment decisions.
